- Those trying to determine how they want their business to grow.
- Those who are not sure if they are an “income earner” or a “business builder.”
- Those who have hired staff and/or need to hire staff.
- Most do not understand the difference between self-employed and entrepreneur.
- Do you want to build a great career? Or a sustainable business? Or both?
- Consider the lifestyle you desire before building your business model.
Here’s the Skinny,
Most of the world does not understand the difference between being self-employed and being an entrepreneur.
The vast majority of small businesses are comprised of self-employed individuals as opposed to entrepreneurs. Yet, in error, many self-employed folks will refer to themselves as being entrepreneurs when they are not.
What’s the difference? Well, let’s start with the definitions from dictionary.com:
Earning one’s living directly from one’s own profession or business, as a freelance writer or artist, rather than as an employee earning salary or commission from another.
A person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.
As you can see, there is a distinct difference.
This month, USA Financial celebrates its 30th year anniversary and I’m blessed to have shared in the growth over all 30 years (except for the first 2-3 months anyway). When I reflect back over those three decades, hindsight 20/20, for the first 2 years of USA Financial’s existence, we ran solo and were undoubtedly self-employed. For the next 8 years we were a more sophisticated version of self-employed, as we had support staff, but we were not much different than a business manager who has gained success and respect enough to be assigned subordinate staff and/or personal assistants by their employer/boss.
It wasn’t until ten years into the life cycle of USA Financial that I can confidently reflect back and realize we transitioned from being self-employed to being entrepreneurs. In fact, our turning point was a one-two punch beginning in 1998, when we…
- officially killed our business structure that emulated the financial services “external wholesaler” model and then;
- launched USA Financial Securities, our broker dealer.
Together, this combination of change required we reconstruct an entirely new business model (and strategy) that took two full years for us to completely re-tool, re-educate and re-deploy. By year 2000, USA Financial was unrecognizable from its former self.
That was our watershed moment in time. From 1998 to 2000 we transformed ourselves from being self-employed to being entrepreneurs… And we’ve been growing ever since.
Someone who is self-employed is simply their own boss, working “in” the business. Whereas an entrepreneur is building a sustainable business model that is not solely dependent upon them for the entity’s ongoing success – and therefore – they tend to spend more time working “on” the business (versus “in” the business).
In our case, the visual transition from self-employed to entrepreneur was dramatic. Notice the permanent and dramatic change in our revenue growth line in 2001 vs. previous years. Prior to 2001, we had minimal incremental increases as we worked hard and performed better at our jobs. But in 2001, we started running an entrepreneurial organization. And for us, that was the ticket.
Please understand, that being self-employed is a perfect choice and solution for many business owners. Not everyone desires to grow an organization and take on the entrepreneurial status. The key is knowing which you desire to be, considering exactly how you desire to intertwine your work life and personal lifestyle so that they successfully co-exist, then structuring your business model and staff accordingly.
That’s the Skinny,